At the Rideshare Guy, we are all about multi-apping. We encourage drivers to try other avenues of income, such as rideshare, and delivery of food, groceries, alcohol, and everything else under the sun. In the spirit of truly multi-apping, senior RSG contributor Sergio Avedian tried food delivery for a couple of weeks with surprising results.
Who says you can’t teach an old dog new tricks? Well, the old dog is me, and recently, I gave Uber Eats a try. I have been a driver and passenger on both platforms (Uber/Lyft) for over six years. When the money is good, it is really good for rideshare, but when it is bad, like it has been during the summer of 2022, it is really bad.
I live in the suburbs of Los Angeles, a place called Granada Hills, which is about 30 miles from LAX and 25 miles from Downtown LA. When I go out driving, I make sure that I am in the Hot Zone without too many dead miles. I have been trying to educate drivers for the past four years on how to maximize their earnings through various strategies.
But food delivery? Never! Why would I spend half an hour delivering a burrito to someone on the third floor of an apartment building and make $6?
For the past three months, rideshare in LA for me at least has been at a snail’s pace. Granted, it is the regular summer slowdown. Additionally, all promos and bonuses have been reduced by 60-80%.
As we all know, some weeks’ incentives add up to 40% of a driver’s weekly income. With that said, I was struggling to break $30 per online hour. Last year was so great that when my earnings dipped 50% below those levels, I thought I would finally give food delivery a try.
Quick Summary:
- Delivery can be profitable using some of the same strategies as rideshare driving.
- Try multi-apping between rideshare and delivery to fill gaps.
- Learn, adapt and educate yourself on the best tips and tricks to be successful.
My First Week of Food Delivery
I turned the app on, selected Uber Eats, and waited. As I said, I am not in a densely populated area of LA, but I still thought I would get ping after ping. Well, was I in for a surprise or what!
Turns out, food delivery is nothing like rideshare. Even in the San Fernando Valley where I live, rideshare requests outnumber deliveries by a wide margin.
Plus, Uber Eats has fierce competition coming from DoorDash. These companies occupy the top two spots and dominate other smaller players like Grubhub. It became quite evident that I would be waiting for pings. Not that there were none, but the quality of the orders were less than what I expected.
Watching some gig tubers on Youtube, I thought it would be a piece of cake, but like anything else, what you put into it is what you will get out of it. Now I realize why so many channels glorify this part of the gig economy.
I did not know what to do. Should I laugh or cry? As I always think of profits first, I put the numbers on a spreadsheet, and here they are:
53 trips with $10 average per delivery
- $14.16 per Online Hour (Below Minimum Wage)
- 40% Utilization Rate (Horrible)
- $34.90 per Active hour (Decent)
- 180 total miles (Great)
- $2.91 per mile (WOW)
After analyzing my numbers, I started feeling much better (glass half full). Yes, I was out there for 37 hours, and my Utilization Rate (UR) of 40% was horrible. But, I was productive while I was sitting in the car and waiting. I was conducting RSG interviews, writing articles on my laptop, answering emails, etc. So, those 37 hours I spent outside the house did not feel like a total waste of time.
After all, I am in the suburbs, there are only a few hours where food delivery demand is at its peak, and there are a lot of drivers like me out there. However, I did not quit. I was determined to get my numbers up to par.
Another reason my UR was horrible was probably because I was on a single app. I am currently on a waiting list for DoorDash as well as Grubhub. Once I get them all, I will be able to multi-app.
I have learned something from another contributor on the RSG Youtube Channel, Pedro DoorDash Santiago: NO TIP, NO TRIP. Another thing I did was cherry-picking, and I loved it!
However, one thing stuck out that rideshare driving can’t touch. Total miles driven and dollars per mile. There is no way I can make this kind of money doing rideshare by just driving 180 miles.
So, with that in mind, I started to strategize. How tough could this be? I am a top 1% driver in LA! I thought, why don’t I also apply the 3 Ps to this gig? Patience, Position, and Planning!
Google Maps to the rescue! I searched for what I learned from another delivery driver for Power Strips. These are where a majority of restaurants are located. I triangulated those Power Strips and tried to stay within the zone, and with the same Cherry Picker attitude, I went to work.
Were there a lot of garbage orders? Of course there were, did it feel like I was being throttled after rejecting some of the following delivery requests? Of course! Nothing new here, Uber has to do what Uber has always done.
I will not attempt to do a delivery for less than $2 per mile, preferably more. From the first week, I discovered which restaurants had a good online order system for me not to wait excessively for food.
On the flip side, I blackballed a lot of spots due to understaffing or not having the capacity to handle an influx of online orders. In delivery, time is money! There are limited hours when food delivery is at its peak, so there’s no need to waste precious minutes waiting for an order and no need to accept orders from CLOWNS (people who do not add a substantial tip).
With all this knowledge and fire in my belly, I went to work.
My Second Week of Food Delivery
50 trips with $11 average per delivery (10% better than the first week)
- $19.90 per Online Hour (30% better than the first week)
- 48% Utilization Rate (20% better than the first week)
- $41.30 per Active hour (18% better than the first week)
- 180 total miles (Great)
- $3.10 per mile (POW, WOW)
Boy, did my application of the 3 Ps pay off. I still think I could have done better. I need to train my eyes to the map that shows up with the ping. But the improvement from one week to the next was like day and night. All my metrics vastly improved.
The same neighborhood, the same hours, what changed? I learned, I adapted, and I educated myself. Are there other drivers who will do better than me? Absolutely. I am a veteran of rideshare but a delivery newbie. I will find more honey holes going forward and play the position game better.
Takeaways for Drivers
I fully enjoyed the two weeks of experimenting with food delivery. I kept thinking, why didn’t I do this during the pandemic? I am sure it was great when everyone was sitting at home. Once I am on board with the other apps, I am certain I will improve my numbers even more, especially my Utilization Rate (UR).
Will I do rideshare again? Of course. When the schools reopen and the city is bleeding with surge. There is no doubt that as a rideshare driver, you will be busier (higher UR) and make more money per online hour, including incentives and surge, which do not apply to deliveries.
There are no weekly Quests for deliveries like there is for rideshare. These two weeks included all my Quests available to me. I am sure Uber will cut me off soon because, looking at some of the receipts, Uber’s margins on deliveries are much less than rideshare (no 50% take-rate here). Applying rideshare Quests to delivery was sweet.
The fact that I was never more than 7 miles away from my house and the total miles driven (dollars per mile) is unbeatable. Food delivery base rates are absolutely horrible. I always complain about rideshare base rates, but delivery is much worse.
One possible downside of food delivery is something called tip baiting! Take a look at the receipt after finishing a delivery, this is what you will see:
Now you have to wait an hour to see the full estimated fare (tip) in your account. If the customer takes that tip away, this trip becomes a money loser.
Why does Uber allow customers to do this? I get it. Maybe the quality of the service will be subpar, but in my opinion, that gives the consumer too much leverage. Fortunately, in two weeks and 103 deliveries, they all included a tip, and I did not get tip baited.
For two weeks, my net fares were $468.76, and the tips totaled $489.81. Where would I be without tips and cherry-picking?
Here is a list of positives for food delivery:
- Food does not slam your door
- Food does not ask for an AUX cord
- Food is never drunk
- Food does not give you an attitude
- Food is quiet; no need to play shrink
- Food is not a backseat driver
- Food does not throw up in your car
- Food does not rate you a 1 star for no reason
- Delivery customers tip a lot better than passengers
Will I do delivery again? Absolutely. In fact, I will go out and do rideshare with the delivery tab on.
I loved it! I am not going to deny it. The fact that I could cherry-pick without incurring the penalties for acceptance rates (in California, a driver must accept five of the last 10 requests to see passenger destination) that apply to rideshare was thrilling.
Another positive is that as a rideshare driver, you have about six seconds to make a decision to accept a request or not, but as a delivery driver, the ping lasts almost 30 seconds.
Then there is the possibility of me receiving subsidies due to Prop 22 in CA. I may receive an adjustment of 120% of the minimum wage for LA county ($16.01-$19.20) plus 30 cents per active mile. It will probably add up to quite a sum of money since my net fares will most likely fall below the minimums under Prop 22. I have never received an adjustment when I only did rideshare, but the base rates for delivery are so bad that I may qualify for some extra dollars.
I guess you can teach an old dog new tricks!
Have you ever gone from rideshare to delivery? How was the switch?
-Sergio @ RSG
